Intangible resources influencing the international performance of professional service SMEs in an emerging market

Abstract

PurposeThe purpose of this paper is to empirically examine the relationships between the drivers of economic growth in emerging markets to include entrepreneurial orientation (EO), human capital (HC), relational capital (RC), and international performance (IP).Design/methodology/approachData were collected from 199 small- to medium-sized Indian professional service entrepreneurs that employ less than 500 employees and engage in international business. Given the multidimensional nature of IP, structural equation modeling (SEM) was used to test the measurement and substantive models.FindingsSEM and mediation tests confirmed significant relationships among the constructs in the model and indicated that HC can be leveraged for international growth using RC to deliver new professional services across borders. EO, the strongest predictor, along with HC and RC, directly influenced IP. The effect of HC is mediated by an EO and RC.Research limitations/implicationsBy design, only successful professional service firms in India were studied, which limited generalizability.Practical implicationsEntrepreneurs can enhance the likelihood of international expansion success by utilizing highly skilled HC and developing strong network relationships. Entrepreneurial managers should leverage their professional service resources through judicious investments in personnel and relationship-building skills to develop RC.Originality/valueThis study examined entrepreneurial professional HC and RC as related to international entrepreneurship emerging market research. Data collection in India contributes to empirical research on internationalization from emerging markets.